Trump’s Return Set to Disrupt International Relations as He Invokes McKinley
Trump gave us some insight into when he thought America was last great
Monday’s chilly weather in Washington led Donald Trump to take his oath of office indoors, ahead of his return to the White House as the 47th President of the United States. This week marks the return of his “America First” policy agenda to government. For the more than 77 million Americans who secured Trump's comeback victory, this was their week to celebrate and look forward to the next four years, which Trump has described as the beginning of a new golden age for Americans.
The inter-Trump years are over, and as it turns out, Trump’s win in 2016 was not an aberration but the beginning of a new trend. While this will be welcomed domestically by the majority who voted for him and by the handful of political leaders around the world who are big fans, it does not seem like such good news for America’s biggest international allies and partners in North America and Europe.
The logic is simple: if America must come first, those partners and allies are unlikely to be treated as equal partners but instead be relegated to at least second place. Nobody likes to feel second best; they prefer to ally with the winner as equals. Still, if we look at this counterintuitively, it is also possible that Trump's pursuit of an America First policy may, in the long run, prove helpful to allies and trading partners.
The Influence of History
Even before he returned to office, Trump, who is well known for wanting to Make America Great Again, gave us some insight into when he thought America was last great, in other words, what it is that he is seeking to recreate. Knowing more about that can go some way towards giving us a direction of travel for the next four years.
When Trump was first elected in 2016, I always thought that Trump meant the 1980s were the great times he wanted to return to, given that it was Reagan who had popularised the MAGA phrase during the 1980 election campaign and had restored America’s confidence after the Vietnam era. Reagan also played a major part in ending the Cold War. It is not unfair to say that America, by many metrics, won the 1980s.
But, maybe Trump is seeking to restore American greatness from a much earlier time, as far back as the 19th century, when there was much talk about American exceptionalism, the Monroe Doctrine, and manifest destiny. Perhaps it is the early 19th-century Jackson era he is referring to, given that he had previously expressed admiration for the seventh president known for his early populism.
Last time out, Trump even hung Jackson’s portrait on the wall of the Oval Office. That admiration still seems to be there. It was reported this week that a new portrait of Jackson adorns the Oval Office wall for Trump’s second term. But, it may very well be another 19th-century president, William McKinley, who is the leader who inspires Trump the most, given how he has recently, on several occasions, name-checked the late 19th-century president known for expanding the United States (Hawaii, Puerto Rico, Guam, and the Philippines) and a fondness for protectionist tariffs. He is also the President who commenced the Panama Canal construction discussions. Maybe it is this era that is the source of Trump’s inspiration.
First Week in Office
It is not known if McKinley’s painting will also make its way into the Oval Office. Still, it is noteworthy that one of Trump’s first priorities as President this week was to sign an executive order restoring McKinley’s name to the highest mountain in North America (the Alaskan mountain had its name changed to Denali during the Obama administration).
In the run-up to the inauguration, Trump floated the idea of taking back control of the Panama Canal, buying Greenland (a Danish territory), and introducing protectionist tariffs on imports to make the United States rich (it is already the richest nation in the world across several metrics). Those themes were also present this week in his inaugural address in the Capitol.
Here is an excerpt of some of what he said:
“President McKinley made our country very rich through tariffs and through talent — he was a natural businessman — and gave Teddy Roosevelt the money for many of the great things he did, including the Panama Canal…China is [now] operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back…
The United States will once again consider itself a growing nation — one that increases our wealth, expands our territory, builds our cities, raises our expectations, and carries our flag into new and beautiful horizons. And we will pursue our manifest destiny into the stars, launching American astronauts to plant the Stars and Stripes on the planet Mars.”
American Foreign Policy
Trump's foreign policy signals represent a sharp turn towards basic self-interest pursued by the world's most powerful country, conducted in a transactional way. Self-interest, of course, is always the primary goal in international relations; the argument is really about how best to secure it in the times we live in. Nation-states have a choice in how they interact with the rest of the world. They can choose to work together by cooperating on agreed rules to produce win-win solutions or instead pursue relative gains at other nations' expense. Trump seems to prefer the latter.
If that is the case, then it should be expected that over the next four years, hard power will be prioritised over soft power because it can be perceived as offering more leverage in achieving relative gains. The art of the deal is likely to be the new diplomacy as the White House looks set to prioritise national interests ahead of more conventional international institutions that have traditionally given lesser-sized allies and partners a bigger voice in global affairs. If 19th-century ideas can work in the 21st century, then the rules-based international order that the West has been accustomed to since the middle of the last century could succumb to one focused on those of an earlier era, great power politics, and the return of spheres of influence.
One positive point about 19th-century international relations is that the century was overall relatively peaceful in terms of interstate war. Trump starts his second term with much more experience in international relations and with a good measure of how Washington and the world work. An upside of Trump’s approach is that he sees it as in America’s interest to have peace abroad. In his inauguration speech, he declared that:
“My proudest legacy will be that of a peacemaker and unifier. That’s what I want to be: a peacemaker and a unifier.”
This is Trump’s second and thus final term. It will define his legacy. As widely expected, he was unable to fulfill his campaign promise to end the Russia-Ukraine conflict in his first 24 hours. However, if he can use America’s power to broker a just peace to that conflict and the conflict in the Middle East, then that would be a significant positive development for which he should get the due international recognition. Many allies would also welcome an expanded definition of what Trump sees as unity. Time is of the essence, and time will tell what is possible.
A Man in a Hurry, Disrupting the Status Quo
The Republican Party holds majorities in the House and the Senate, and the Supreme Court leans Conservative. That means the new President can score a lot of early policy wins. After being sworn in, he certainly seemed like a man in a hurry.
On his first day in office, he signed an unprecedented number of executive orders, intent on changing the status quo. While many were related to domestic issues, some had international significance and presented a big challenge for America’s closest allies and partners. Yet again, Trump is leaving the Paris Climate Agreement and the World Health Organisation. This week, it was reported that the new administration intends to implement a 25% trade tariff on imports from Canada and Mexico and a 10% tariff on China, all due to begin on 1st February. Europe awaits how Trump chooses to interact with them, but trade tensions are expected.
In addition, the Trump administration has announced that they are not committing to the previously agreed OECD global minimum tax deal. In his address to Davos this week, the President signaled tax cuts and a reduced corporate tax rate of 15% for companies that make their products in America. He also told the audience that he was going to ask all NATO nations to increase defense spending from 2% to 5% of GDP. Moreover, Trump has issued an executive order revoking the previous Biden executive order on Artificial Intelligence (A.I.) safety.
Much For Allies and Partners to Consider
These developments are likely to cause some concern for allies and partners. Some problems have no borders, such as climate change, which evidently will need global cooperation and solutions. Skepticism of climate change will not make the problem disappear. The scientific evidence shows that the longer we ignore it, the worse it will get. The trade tariffs, tax plans, prospects of losing jobs to America, and increased NATO spending requests will no doubt initially cause finance departments in many countries some sleepless nights, particularly if they are happy with the status quo.
Just like this week's weather in the Capitol, many allies and partners around the world will no doubt be seeking ways to mitigate the cold chill expected to emanate from Washington over the next four years as they adjust to the new administration's international priorities. U.S. consumers could also face the cold chill of higher prices if the tariffs are passed on to them. Moreover, the potential of the new tariffs to push up inflation means that Wall Street is generally not a fan of protectionist economic policy. It will be important to watch for increased market volatility in the weeks and months ahead.
But in the longer run, all may not be so bad. Change also brings opportunity. The Trump shock might be helpful. Rebalanced trade relations with the United States could be the basis for a more equitable relationship.
Some European countries depend too much on America for their exports and have realised that this exposure is not without risks. Yet, more dependence on each other will bring more balance. Europe needs energy, and if the price is right, it could buy more energy from the U.S, which would also reduce its trade surplus. A rebalanced trade relationship could also be the incentive needed to increase competitiveness and economic strength closer to home. There is an incentive now to also look elsewhere for growth and collaborate even more than they do now to become more competitive. A Trump administration skeptical about Europe could also spur a rethink in the United Kingdom about its relationship with its nearest neighbours. America First could ironically help improve European unity. At the very least, it will help London decide whether it is closer to Washington or Brussels. That clarity will be useful on both sides of the Atlantic.
Europe currently depends too much on the U.S. for its protection and much of its military hardware. Spending 5% on defense would allow Europe to defend itself better on its own and invest in its own homegrown defense industry. This outcome would also allow the U.S. to focus on challenges elsewhere, such as in Asia. Moreover, if Trump can broker peace, that would be a benefit not just for the world more broadly, as it would contribute to reducing market volatility, improving global economic stability, and energy security. It would also enable many refugees to return home and rebuild. In the coming months and years ahead, we will find out what is possible.